Bernard Ingham: In this winter of chaos, the dragon of inflation is waiting to rear its head

First and second class postage stamps are going up by 5 and 4p respectively. It will soon be cheaper to send a chap with a cleft stick.

And then from New Year's Day we shall be hit by 20 per cent VAT – up from 17.5 per cent. There really is no end to it. We are – and this is no surprise – back in an inflationary spiral.

This means we ain't seen nothing yet. Wait until the Bank of England hoists interest rates to try to cool the fever.

Not all of this is a consequence of trying to repair the incompetence of Gordon Brown and his henchman, Ed Balls. But their brazen refusal to accept responsibility and their pretence that it would all come right in the end under their TLC just rubs salt into the public's wounds.

It is, of course, true that the more responsible commentators argue that the weak growth forecast for the next two years will temper inflation. The coalition's 81bn spending cuts, lower household expenditure and subdued labour costs will also bear down on it.

There are those who argue that a lax immigration policy – combined with a virtually non-existent deportation policy – will also help because immigrants depress wages, though not in banks.

They ignore the cost of keeping five million Britons on the relatively comfortable dole, given their lack of ambition. The fact remains that, depending on how you measure it, we are significantly over the target maximum increase in the consumer price index of 2 per cent a year.

At 3.3 per cent, it is not yet serious. But those of us who started our Civil Service careers in the National Board for Prices and Incomes, and saw inflation spiral to 26.9 per cent, know two things: the dragon is never slain and it is very hard to subdue.

It is also argued that inflation is in the Government's interest because it helps to erode the infamous Brown/Balls debt burden of something well over 800bn. It might seem highly desirable to wear away that millstone but, since it also hangs around our necks, it would rob us of the value of our savings.

Every pensioner in this land is already the poorer for the juvenile theoretical economics of Brown/Balls. For years now we have been doing the banks a favour by keeping our money with them in view of their derisory rates of interest. This is not to mention those who had their retirement wrecked by Brown's sabotage in 1997 of the private pensions system.

To give the coalition credit, I do not believe that it is of a mind to succumb to the temptation of easing its severe debt problem through inflation. But it would do well publicly to recognise it exists and resolutely to turn its back on it.

One of the best ways of demonstrating its integrity of purpose would be for David Cameron summarily to fire Chris Huhne, our Energy Secretary whose ambition is to be the greenest thing in government since grass. This is because Huhne is stoking inflation with his every word.

He is not without merit since, contrary his every utterance in opposition, he has accepted the urgent need for nuclear power.

Nor is it realistic to suppose he could secure our energy supplies without some cost to the consumer, given the way our ageing generating assets have been sweated these last 20 years.

But his devotion to the busted flushes of wind, sun, waves, biomass and – yes – that white elephant called carbon capture and storage (CCS) to enable us to burn coal and gas with impunity for the environment is pointlessly expensive.

Huhne's greenery – and that of Labour Ministers before him – already loads your electricity bill by 100 to no purpose whatsoever. What is more, that cost is projected to spiral under Huhne's misguided tutelage.

David Cameron won't get rid of Huhne because he, too, is a daft green and, in any case, couldn't because Huhne, Heaven help us, ran Nick Clegg desperately close as Liberal Democrat leader. This is why we must keep a close eye on this Coalition's anti-inflation policy. By stoking inflation by wasting other people's money, Huhne is conveniently eroding Britain's debt – and our substance.